As per the core Reading:
Revision risk refers to the risk of adverse variation of an annuity’s amount as a result of unanticipated revision of the claims process, and is intended only to cover genuinely reviewable annuities, not those that are index-linked.
The sort of ‘genuinely reviewable annuities’ being referred to in the revision risk definition are annuities that arise from non-life insurance claims (eg accident insurance) where there is a risk that the annuity amount might change (eg due to a change in the health of the injured person or a change in the legal environment).
Could you please explain this concept in more detail? Is this risk only applicable on the annuities?
Revision risk refers to the risk of adverse variation of an annuity’s amount as a result of unanticipated revision of the claims process, and is intended only to cover genuinely reviewable annuities, not those that are index-linked.
The sort of ‘genuinely reviewable annuities’ being referred to in the revision risk definition are annuities that arise from non-life insurance claims (eg accident insurance) where there is a risk that the annuity amount might change (eg due to a change in the health of the injured person or a change in the legal environment).
Could you please explain this concept in more detail? Is this risk only applicable on the annuities?